Monday, May 04, 2009

Good News: New York Times Downward Spiral Continues!

They've just announced raising the prices of their Monday-Saturday editions.

To which, a financial blogger wrote this:
Anyone who has ever taken an economics course knows the basic rules of supply and demand. When demand is high and supply is fixed, prices rise. Likewise, when demand falls and supply remains unchanged, prices fall. Given these basic rules of economics, one would assume that the newspaper industry would be cutting prices given the continued decline in their circulation rates. Last week, the Audit Bureau of Circulations announced that newspaper circulation in the six months ending March 31st declined by 7%, which was an acceleration of the declines seen over the last two reporting periods.

Less than one week after these figures were released, however, The New York Times (NYT) seems to think that the answer to weaker demand is higher prices. This morning, the Financial Times is reporting that the Times will raise the price of its Monday - Saturday editions to $2.00 (from $1.50) and the price of its Sunday paper to $6 (from $5). Higher Prices = Higher Demand? Adam Smith must be rolling over in his grave.

Source: here

The day New York Times would close would be a decade or so too late.

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